New Rush-Aetna Insurance Offers Lower Cost, Less Choice

Oct. 15--Rush Health has formed a partnership with insurance giant Aetna to create a health insurance plan that will be available to Chicago-area employers starting next month, the two organizations said Thursday.

Called Aetna Whole Health Chicago, the plan will have cheaper premiums than the insurer's PPO plan, but there's a trade-off. The plan will limit consumers' choices to Rush's 1,300 primary care doctors and specialists at its four hospitals. With few exceptions, the plan will not pay for trips to doctors who aren't in the Rush health system.

The new insurance product is a sign of the rapidly transforming U.S. health care system. Health insurers are cozying up with health systems on new payment arrangements and care models. They are moving away from uncoordinated, volume-driven care to improving the health of populations and paying for value.

One outcome of collaboration has been the creation of so-called narrow provider networks. As the name implies, narrow networks place limits on the doctors and hospitals available to subscribers. Less choice in a health plan typically means lower premiums.

More employers are evaluating narrow network plans in an effort to control health care costs. In the individual market, where insurers are under intense pressure to keep premiums low, narrow networks are proliferating. While limiting choice seems anti-consumer, the Kaiser Family Foundation has found that some people who don't have close ties to doctors or hospitals seem willing to accept restricted networks in return for lower prices.

Aetna has embraced narrow networks by working in tandem with health systems across the country to offer co-branded plans. Aetna CEO Mark Bertolini promoted the relationships in recent testimony before Congress, saying they have demonstrated success in lowering costs as well as improving quality. Aetna's agreement to acquire rival Humana is under regulatory review.

For example, during the second year of collaboration with Banner Health Network in Mesa, Ariz., Bertolini said Banner saw the following results in the Aetna co-branded fully insured plan:

--5 percent medical cost savings.

--9 percent reduction in radiology services.

--9 percent decrease in avoidable admissions.

The collaboration with Aetna is a first for Rush. The company will be taking on financial risk in the cost of care as well as patient outcomes and quality measures, said Brent Estes, the health system's president and CEO.

"We see this as a much deeper collaboration, from how the product is designed and priced to how do we work together to care for patients," Estes said. "We think this will break down some of the historical issues between providers and payers."

Nitin Bhargava, president of Aetna's Illinois operations, said the company partnered with Rush because of its reputation for quality and readiness to take on insurance risk. There's a significant amount of interest among the health care systems for more collaboration but not everyone is ready to take on risk, he said.

The premiums for Aetna Whole Health Chicago will be 8 percent to 15 percent lower than the company's broad PPO plan, Bhargava said. The plan will be available to self-insured employers -- those who pay health care costs themselves -- beginning Nov. 1 and take effect March 1. Fully insured plans will take effect on April 1.

The plan will be available in Cook, DuPage, Kane, Lake, Kendall, Will, Kankakee and McHenry counties. Rush has hospitals in Chicago, Aurora, Oak Park and Kankakee.

asachdev@tribpub.com

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